First Quarter 2018 Highlights:
- Total revenues were
$355.6 million compared to$366.1 million for first quarter 2017 - Circulation revenue for first quarter 2018 was
$134.2 million , up 12.2%, compared to the same period of 2017 - Digital-only subscribers increased 90% to 342,000 at the end of the first quarter 2018, up from 180,000 at the end of the first quarter 2017
- Content revenues for troncX, which includes digital-only subscription revenue, grew 61.7% year-over-year
- Average monthly unique visitors were 75.3 million in the first quarter 2018, up 28% from the first quarter 2017
“During the first quarter 2018, we undertook a number of actions that we believe position the company to compete effectively as the media industry continues to evolve,” said tronc Chairman and CEO Justin Dearborn . Dearborn continued, “Key items among these actions include the following:
- The Company entered into an agreement to sell the
Los Angeles Times ,San Diego Union-Tribune and otherCalifornia media titles for$500 million plus the assumption of pension liabilities (the “California transaction”); - Acquired a majority ownership stake in BestReviews, a high-growth e-Commerce product review company, with the intention of furthering our revenue diversification strategy and leveraging our existing local media network;
- Continued the integration of our recent investment in the
New York Daily News (NYDN), which included rebuilding the local sales organization and leveraging its state-of-the-art production facility; - Executed an agreement with
Cars.com transferring sales affiliation and creating a digital advertising partnership; and - Implemented our newsroom and sales reorganization plans aimed at positioning us for growth in our local markets”
“In connection with the California transaction, after-tax cash proceeds will be used to repay all current outstanding corporate debt. Post transaction, we expect to have a significant cash balance that we intend to use to aggressively pursue a continued push into acquiring complementary digital properties and to continue to leverage our scale as we expand our reach.”
First Quarter 2018 Results
First quarter 2018 total revenues were$355.6 million , down 2.9% compared to $366.1 million for first quarter 2017. Revenue for the first quarter 2018 includes $25.9 million attributable to the NYDN (acquired in September 2017 ), $3.2 million attributable to BestReviews (acquired in February 2018 ), and a $14.2 million downward impact associated with a new agreement to convert tronc's eight affiliate markets into Cars.com's direct retail channel, which went into effect on February 1, 2018.
First quarter 2018 total revenues were
First quarter 2018 total advertising revenue and digital advertising revenue were $156.4 million and $30.9 million , respectively, which includes the impact from the Cars.com agreement. Excluding this impact, on a year-over-year basis, total advertising revenue would have been down 9.9%, and digital advertising revenue and would have been up 2.0%.
Total operating expenses, including depreciation and amortization, for first quarter 2018 were $374.4 million , up 5.7%, compared to $354.0 million for first quarter of 2017. The increase was mainly due to the impact of including NYDN, partially offset by our ongoing cost reduction programs and reduced expenses related to the Cars.com transition.
First quarter 2018 was impacted by fees associated with a consulting agreement that the Company entered into with Merrick Ventures LLC , Michael W. Ferro, Jr. and Merrick Media, LLC . Following Mr. Ferro’s retirement from the Company’s Board on March 18, 2018 , the Company fully expensed the $15.0 million contract in the first quarter, which included $500,000 while Mr. Ferro was actively engaged in the business. Including this charge, net loss for first quarter 2018 was $14.8 million , or $0.42 per share, compared to a net loss of $3.0 million , or $0.08 per share, for first quarter of 2017.
Adjusted EBITDA for first quarter 2018 was $24.4 million , versus $33.7 million in the first quarter 2017, due primarily to an anticipated negative first quarter 2018 adjusted EBITDA at the NYDN and digital investments.
Net cash provided by operating activities was $21.6 million for first quarter 2018. Capital expenditures totaled $7.2 million for the quarter. Debt was reduced by $5.3 million , and pension and long-term post-retirement liabilities decreased by $9.1 million compared to fourth quarter 2017. Cash balance was $162.7 million , which reflects $33.7 million used for the Best Reviews transaction completed in February 2018. This was the primary driver of an increase in net debt of $22.0 million in first quarter 2018 compared to fourth quarter 2017.
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